"Hunting PLC's Strategic Acquisition of Organic Oil Recovery Technology"

Hunting PLC, a precision engineering group, has made a significant move in the oil and gas industry by acquiring the Organic Oil Recovery (OOR) technology for $17.5 million. This acquisition, which includes over 25 patents, distribution rights, and a laboratory in California, positions Hunting PLC to accelerate the commercialization of this enhanced oil recovery solution globally. The deal also involves a 15% royalty payment to the sellers on revenue earned over the next 15 years, highlighting the long-term strategic importance of this technology.



The OOR technology offers several benefits to oil and gas operators, including improved ultimate recovery of oil reserves, cost efficiency, reduced water cut during end-of-life production, lower hydrogen sulphide levels, and extended field life. These advantages make the technology highly attractive to operators looking to maximize their returns on investment while minimizing operational costs.

The acquisition aligns closely with Hunting PLC's 2030 strategy, which focuses on expanding its market presence and increasing revenue streams. The global rights to the OOR technology will enable the company to accelerate commercialization across North America and the rest of the world. This strategic move is expected to be margin accretive, contributing positively to the company's financial performance and supporting long-term growth.

Hunting PLC's financial highlights for the year ended 31 December 2024 show a strong cash position, with cash and bank / (borrowings) at $104.7m, an increase of $105.5m from $(0.8)m. The company's free cash flow of $139.7m indicates a strong ability to generate cash from operations, which can be used to fund the royalty payments and other investments. The acquisition of the OOR technology is expected to further enhance the company's financial performance and cash flow in the coming years.

The OOR technology's ability to improve oil recovery, reduce costs, and extend field life positions Hunting PLC competitively within the oil and gas industry. The technology's cost efficiency and simplicity of deployment make it attractive to operators looking to maximize their returns on investment. The widespread interest in the technology, as evidenced by field trials with numerous blue-chip exploration and production companies, indicates a strong market demand.

Hunting PLC has secured up to $60 million of orders from operators in the UK North Sea, with a strong pipeline of opportunities likely to be secured in the coming years. Additionally, the company is looking to build its presence in the Middle East with the construction of a small laboratory in the UAE to service clients in the Eastern Hemisphere. This expansion into new geographic markets further enhances Hunting PLC's competitive position and opens up additional revenue streams.

In conclusion, the acquisition of the OOR technology by Hunting PLC is a strategic move that aligns with the company's 2030 strategy. The technology's ability to improve oil recovery, reduce costs, and extend field life positions Hunting PLC competitively within the oil and gas industry. The acquisition is expected to be margin accretive, contributing positively to the company's financial performance and supporting long-term growth. The strong cash position and free cash flow generation of the company will help manage the financial implications of the acquisition, positioning Hunting PLC for continued success in the oil and gas industry.